What Is Personal Injury Liability Insurance?

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A lawsuit on behalf of an injured person can cause so much financial loss to an individual that she goes bankrupt. A company can even go out of business if a liability lawsuit results in a crushing defeat. That's why many businesses and individuals buy personal injury liability insurance. Their insurance coverage covers lawsuits filed because of their alleged negligence and protects their financial interests.

Defining Personal Injury

Personal injury occurs when negligence on the part of an individual or business results in damage to a customer's physical or mental condition. Sometimes, the circumstances of an injury prompt one person to make a claim against another party. Imagine you own a store that sells soda packaged in glass bottles. If a glass bottle falls and breaks, its contents could spill all over the floor. A customer can walk by and slip and fall because of that spill. The resulting injuries to that person could be expensive, possibly requiring medical attention, a stay in the hospital, surgery, lost time from work and other expenses. The injured person might have a legal right to sue the business owner for damages, including pain and suffering. A personal injury lawyer can explain what expenses can be recovered under the state's personal injury laws.

Defining Liability Insurance

Each state decides what types of businesses must carry general liability insurance. This type of insurance protects a business owner from claims of bodily injury, medical expenses, defending lawsuits and other kinds of liability. If you own a business, you might have to purchase general liability insurance, which includes personal injury insurance. Also, because of the nature of your work, you may be required to carry professional liability insurance. For example, a surgeon who operates on patients would carry this kind of insurance in case his actions or negligence hurt or kill a patient.

Deciding Who Needs It

When you go to buy a license to operate a business or to practice a certain profession, you may be asked to provide proof of liability insurance. Businesses and professionals who must purchase insurance are not the only ones who can buy it. A professional blogger might decide to purchase liability insurance because she believes she could be sued for damages based on something published on her blog.

Getting Quotes

Talk to different insurance agents and compare the free quotes they provide on demand. Ask for the amount of insurance coverage suggested by an insurance agent to meet state requirements. Consider whether you want to buy extra coverage to further protect your business. Even if you don't have to have insurance under state law, you may find an affordable policy that covers you for this kind of liability.